As American students now cumulatively owe about $1 trillion in student loan debt, Yahoo is publishing first-person accounts from those who are still paying and those who have lessons to share. Here's one story.
FIRST PERSON | In 1996, I graduated from Rockford College with a degree in psychology with roughly $50,000 in student loan debt. At the time, minimum wage was $4.75 per hour, and a person with a high school diploma could command an entry-level wage for a full-time job of $8 to $10 per hour. I had a college degree and a strong GPA, so I entered the job market with high expectations.
After a series of job offers with a starting salary around $11 per hour, I realized my mistake. I had bought the lie. I was a mark, I was a sucker, and now I was a slave to Sallie Mae. Sallie Mae, the lender for my student loans, owned me.
Just to be clear, the lie was that if I went to college and worked hard then I would be rewarded with a high-paying job that would more than cover the cost of tuition. I remember sitting in a high school auditorium with my entire senior class back in 1992. Mr. So-and-So had been brought in to hammer home the lie with a slick presentation. (Keep in mind that the presentation was back in the days when slides were projected using transparency film on an overhead projector, but I digress). Mr. So-and-So capped his presentation with a glorious statistical fact: People with college degrees make up the gap in earnings for the time the spent in school in an average of five years and earn more than a million additional dollars in cumulative lifetime earnings that people with only a high school diploma.
Two decades later, my 16-year-old daughter is getting advertisements in the mail from colleges telling the same lie: "Don't think about it," they insist. "School will pay for itself." The lie has been updated slightly; the estimate of cumulative lifetime earnings for people with a college degree has been inflated so that it still eclipses the cost of college tuition.
I am in my late 30s now. I deferred my loan payments until finishing a graduate degree in 2002. I have been paying Sallie Mae ever since. The funny thing is that I owed Sallie Mae around $50,000 nine years ago. After making more than 100 consecutive monthly payments, I still owe Sallie Mae around $50,000.
In my mind, the check I write each month as a student loan payment goes to pay for a really nice luxury car. I never get to see the car or drive it, though, because a mid-level Sallie Mae executive drives it back and forth to his country club to play golf with an administrator from my college.
I am grateful for my education, but the true cost of financing it was intentionally hidden from me. My college and the student loan company conspired together in a predatory lending partnership.
They said, "Sign here and you will be rich."
As an 18- to 22-year-old kid, I believed them and signed.
- Sallie Mae